RadioShack gift card holders want priority for $43 million in claims

By Kali Hays

New York, July 20 – RadioShack Corp. is facing a class action lawsuit brought by holders of canceled company gift cards allegedly totaling $43 million, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

Most of the gift card claims are worth $500 or less, and the class representative, Mark Haywood, said that if the gift card claimants are forced to go through the claims administration process “the debtors will likely be able to easily defeat such claims.”

According to the lawsuit, RadioShack’s plan of liquidation “does not indicate the process or notice procedures for gift card holders” and classifies the claims as general unsecured claims.

Under the company’s current plan, general unsecured creditors are to receive a share of remaining liquidating trust assets after all other claims have been paid.

The lawsuit asked that the gift card creditors be treated as priority claimants under the plan.

A hearing to confirm the company’s proposed liquidation plan is set for Aug. 26.

RadioShack is a Fort Worth, Texas-based technology retailer that filed for bankruptcy on Feb. 5. Its Chapter 11 case number is 15-10197.

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